Legacy Iron Ore completes acquisition of Queensland coal tenements

Legacy Iron Ore has completed the acquisition of six highly prospective tenements for quality coking and thermal coal in Queensland, marking its first foray into the state’s coal sector.

The acquisition forms part of Legacy’s strategy to build its portfolio of steelmaking raw material assets.

It is the first corporate transaction undertaken by Legacy since India’s largest iron ore producer and rapidly developing steel maker, NMDC, acquired a 50% stake in the company in December 2011.

Two tenements – EPCA 2303 and EPCA 2304 – near the townships of Mundubbera and Eidsvold, have now been granted allowing settlement by Legacy to occur, with the final four awaiting grant.

Highlighting the attractiveness of the region, the coal tenements are surrounded by mining giants BHP Billiton and Xstrata, as well as a number of major Indian corporations, which have made substantial coal investments in the area.

Combined, the tenements cover around 3,200 square kilometres with coal intersections identified from historical drilling.

In the Surat Basin, although no defined drilling has been conducted for coal, historical drilling for base metals and gold has intersected coal seams of between 0.3 and 3 metres thick from within the Evergreen Formation and the area covered by two of the exploration permits.

Based on historical data, EPCA 2303 and EPCA 2304 are likely to have an exploration target of 130 to 580 million tonnes with a raw ash of 12% to 26% and a gross calorific value of 5,500 to 6,500 kilocalories per kilogram.

These tenements are also strategically located close to infrastructure, with a railway line to the port of Gladstone just 21 kilometres east of the project area.

NK Nanda, chairman of Legacy Iron Ore, commented on the acquisition: “The acquisition of the two tenements is an initial entry into the Queensland coal sector, with the remaining four tenements awaiting grant.”